The Dow dropped 208 points yesterday — or about 1.3%.
After last week’s pause, it will be interesting to see if the selloff resumes.
‘Global equities in turmoil,’ reads a CNBC headline.
‘A month after raising rates, Fed faces darker global economy,’ suggests an AP newswire report.
Neither of these is true. The world has not changed significantly in the last month. As we reported, world economic growth was fading then, too. Junk bonds were in trouble then…just as now. There was no real recovery in America, then or now. And Sarah Palin is just as entertaining.
We’ll get to her in a moment… but first more on the current market situation.
Up and down
Equities aren’t in ‘turmoil,’ despite the press claims. They are simply going down.
We explained it to a reporter from the Economic Times of India yesterday:
‘No reason to overthink it. Markets go up, and then they go down. And when you diddle interest rates to make money cheaper than it ought to be, you’re going to get some action.
‘The first thing you’ll get is higher prices, as the cheap money chases returns in the stock and bond markets. The second thing you see is lower prices as the booms and bubbles eventually correct. No mystery to it. Night follows day. Busts follow booms. Credit contractions — with lower prices — follow credit expansions.’
The reporter was unsatisfied.
‘What can policy makers do to prevent a selloff?’ he asked.
We smiled. That’s as far as he wanted to go — about a quarter of an inch into a subject that is 10 miles deep.
In the mind of the popular financial press, and most of the investing public, the markets are no different from computers.
When something isn’t working properly, there must be a technician with the answer. There must be some buttons you can push. There must be some trick to getting it working again.
‘Nope. You can’t always escape the consequences of your mistakes,’ we began.
But we let it go there. No point in trying to go ab ovo…back to the egg…to explain this fowl market. Keep it simple.
In praise of Palin
Back in the US of A, we are delighted that Sarah Palin has the public’s ear again.
We’re often not sure what she is trying to say. But it doesn’t matter. With Palin, it’s not the thought that counts. It’s the lack of it.
She aims for simplicity, too — a smart move, since there are easily enough simpletons in the US to elect a president, vice president, and an entire Congress.
We always come to the defence of the poor, the despised, and the hopeless halfwits. We’re pretty sure Palin fits in there somewhere. So, today, we come not to laugh at Ms Palin but to praise her.
We weren’t able to hear Ms Palin’s endorsement of Donald Trump last week. But we thank Sam Leith, a scholar of rhetoric, for helping us deconstruct it.
The speech was such a wonder of ‘oratorical eccentricity,’ he wrote, ‘that it seems very likely she wrote it herself.’
Listening to a moron give a political speech is like watching a blind person do home electrical repairs: You know there are going to be some shocking and amusing incidents.
‘Trump’s candidacy,’ announced Ms Palin, ‘it has exposed not just that tragic ramifications of that betrayal of the transformation of our country, but too, he has exposed the complicity on both sides of the aisle that has enable it, okay?’
What does that mean?
We don’t know. But Mr Leith tells us it was an ‘anacoluthon,’ which he describes as a sentence that ‘sets off boldly in one direction and, with a wrench of grammar, jumps the tracks and ends up pointing in another.’
We still don’t know what Ms Palin meant to say. But at least we now know that there is a word for the disease that caused it.
It doesn’t have to mean anything anyway. There are apparently no complex ideas in Ms Palin’s pensée worthy of careful explication. Instead, her brain simply stews the patriotic patois of the rural rightwing and dishes out the words and phrases primary voters want to hear: ‘commander-in-chief,’ ‘you betcha,’ ‘families,’ ‘make America great.’
This cafeteria also produces some juicy linguistic innovations.
‘Are you ready to stump for Trump?’ she asked. We don’t know what that means either.
‘Give money to’ — as in ‘plump’ — is one possible interpretation. ‘Stand up for’ — as in ‘mount a stump’ — is another possibility. We don’t know.
She also invents a new word: ‘squirmish.’
Don’t overthink it. It works for us as is. We are adding it to our own lexicon, along with her previous neologism ‘refudiate’ and G. W. Bush’s classic ‘misunderestimate.’
Shakespeare invented dozens of words. Why not Sarah Palin?
For The Daily Reckoning, Australia
From the Archives…
By Vern Gowdie | Jan 23, 2016